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University Bancorp Reports $14,687 1Q2006 Net Income

ANN ARBOR, MI -- (MARKET WIRE) -- May 22, 2006 -- University Bancorp, Inc. (NASDAQ: UNIB)
reported unaudited net income of $14,687 for the first quarter of 2006,
versus net income of $163,865 for the same period in 2005. Basic and
diluted earnings per share for the 2006 and 2005 periods were $0.00 and
$0.04, respectively.

Community and Islamic Banking reported a loss of $36,000 during the first
three months of 2006 as opposed to breaking even during the first quarter
of 2005. Earnings at Community & Islamic Banking Earnings during the 2006
quarter were impacted by initial start-up expenses at University Islamic
Financial Corporation. Net interest margin grew 9.7% year over year.
Loans grew 4.2% during the first quarter of 2006 and during the quarter the
first loans under the $100 million FHLMC Islamic secondary market
arrangement were delivered. Subsequent to quarter-end, Islamic deposits
reached $10 million for the first time and the pipeline of Islamic loans
pending closing exceeded $4 million for the first time. Asset quality
among Community Banking Division customers deteriorated slightly during the
quarter with loans on non-accrual increasing by $134,405 to $484,086,
although foreclosed real estate remained at $276,987, and subsequent to
quarter-end, the only commercial loan on non-accrual was brought current
and the only consumer installment loan on non-accrual, a mobile home worth
more than the carrying value, was foreclosed on and listed for sale.

Midwest Loan Services, the Bank's subsidiary, reported net income of
$65,000 for the three months period March 31, 2006 versus net income of
$150,000 in the same period in 2005. Midwest's portfolio of mortgage
subservicing grew to $3.3 billion, 32.0% higher than at the end of the
first quarter of 2005. Subsequent to quarter-end Midwest's portfolio of
mortgage subservicing grew to over $3.7 billion as 40 new credit union
partners were added. Earnings at Midwest Loan Services were negatively
impacted during the 2006 quarter by an annual profit sharing payment of
$70,000 awarded by the board of directors and lower mortgage origination
income due to higher mortgage interest rates during the 2006 quarter which
more than offset significantly higher mortgage subservicing fee income.
Also, in the prior year period, Midwest Loan Services had a positive
$90,000 adjustment for the valuation of servicing rights which decreased to
$48,000 in the current period.

The three month results are not necessarily indicative of future results.
Management projects that income in 2006 will range between $750,000 and
$1,000,000 and that net income in 2007 will exceed $2,000,000. Income for
the balance of 2006 will be enhanced by the now in process transfer to be
complete by the end of the second quarter of $13.5 million of zero cost
escrow deposits to University Bank from another bank that are controlled by
Midwest Loan Services.

University Bancorp President & CEO, Stephen Lange Ranzini commenting on the
2006 projections noted, "We have the capital to grow the bank past $100
million in assets and with the earnings we project we should be able to
more than double the bank's assets without needing to raise additional
capital."

The following table summarizes the pre-tax (loss)/income of each profit
center of the Company for the Three months ended March 31, 2006 and 2005
Income (Loss) Summary

Ann Arbor based University Bancorp owns 100% of University Bank which
manages a total of over $3.75 billion in assets. University Bank is an
FDIC-insured, locally owned and managed Community Bank, and is the only
financial institution headquartered in Washtenaw County rated "Outstanding"
by the FDIC for Community Service and Community Reinvestment. The
Community Banking Division focuses on local businesses, minorities and the
non-profit communities primarily serving the cities of Ann Arbor and
Ypsilanti of Washtenaw County. Other Community Banking Division
specialties include highly competitive deposit products for business
owners, residential mortgages, commercial real estate lending and
insurance, investments and money management through its wholly owned
subsidiary University Insurance & Investments, Inc. University Bank also
engages in Islamic Banking through 80%-owned University Islamic Financial
Corporation, the first and only Islamic Banking subsidiary of a bank in the
U.S. University Islamic offers mortgage alternative financing, the only
FDIC-insured Islamic deposits (offered through University Bank) and Islamic
equity mutual funds (offered through University Insurance & Investments).
University Bank also specializes in mortgage subservicing and mortgage
origination primarily serving over 230 credit unions (representing 2.4% of
all credit unions nationwide) through its Houghton-based 80%-owned
subsidiary, Midwest Loan Services.

Any prediction of the future is inherently not assured. Investors should
read the risk factors listed on pages 22 through 24 in the Company's report
on Form 10K for the year ended December 31, 2005 and any prediction in this
release is intended to be covered by the Safe Harbor provisions of Section
21E of the Securities Exchange Act of 1934.